The offer also includes a provision for no compulsory redundancies for at least two years while working under the private operator.

And it includes an annual pay rise of 3.25 per cent for the next two years.

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By agreeing to terms with the Sydney branch of the Maritime Union of Australia, the government has cleared another major industrial relations hurdle. It has already agreed to a pay rise with bus drivers on government-run bus routes.

"This has been a tough negotiation and the union has worked hard to secure the best interests of the Sydney Ferries workforce," the Sydney branch assistant secretary, Paul Garrett, said.

"It is pleasing that we have been able to negotiate the immediate job security of our members, along with hard-fought conditions.

"The MUA now looks forward to the O'Farrell government delivering on its promise to provide better public transport services for the people of NSW."

The government made an election commitment to "franchise" out the operation of Sydney Ferries.

Under the franchised system, the government will retain control of fares and routes.

The government has shortlisted three bidders, including Serco, the company that runs private detention centres in Australia, to run the ferry system. It will make a decision on the bidders next year.

Sydney Ferries staff members need to have worked there for at least six years to receive the 30-week bonus. If they have worked there for a shorter period they will receive a smaller bonus.